INTERREGIONAL SPILLOVERS IN REGIONAL IMPACT ASSESSMENT - NEW-MEXICO, TEXAS, AND THE SUPREME-COURT

Input-output models are frequently used to estimate impacts, benefits or damages from some event. These analytic models and the questions th ey are designed to answer are usually based on political definitions o f regions. However the true impacts propagate according to the actual spatial pattern of the regional economy. Because of the divergence bet ween the political regions used for analysis and the economic regions on the ground, the economic impacts which spill over political boundar ies can sometimes become analytically important. This paper applies th ese concepts to a case study of allocating irrigation water from the P ecos River in Texas and New Mexico. The U.S. Supreme Court has ruled t hat New Mexico used water belonging to Texas. Our analysis suggests th at the spillover benefits to Texas from New Mexico's use of the water might equal or exceed the benefits which Texas would have gotten from using the water itself. Texas might be better off because New Mexico t ook its water.